Arnold Kling makes the analogy. A few weeks ago, Instapundit either quoted an email, or linked to someone who said that the government stimulus package was like an ugly, clumsy person performing a lewd dance. The intent is to stimulate, but the effect is the opposite.
5 thoughts on “The Stimulus And The Somme”
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I’m racking my brains, trying to think of a case — in any country, in any century — in which a government “stimulus” did any economic good whatsoever. Anyone have any candidates?
It’s weird how human beings treasure theory over actual data.
Carl, let me alter that a wee bit:
a case … in which a government “stimulus” did any economic good whatsoever for a politician.
That makes the question much easier to answer. FDR, Hugo Chavez, Mahmoud Ahmadinejad, etc.
Politicians are not doing this to help the “economy”, they are doing this to buy back votes that they lost due to incompetence.
Prediction: the economy will get worse, but the politicians will get re-elected.
Not supporting the stimulus is not being considered unpatriotic to some degree. So, both parties are going along with it at the time being.
I’ve read the article at last, and IMHO Kling really puts his foot into his mouth with it. Essentially he’s saying that it’s impossible to build a hierarchy (SUCH AS AN ARMY) that operates according to the objectives set by its leadership. The analogy is extremely limited. In fact, the successful strategy to counter WWI trenches was developed by Brusilov (the mastermind behind the rout of Austrians in 1916). That rout was not planned by soldiers, it was planned by Brusilov.
It just goes worse as the article rolls down. The technocrat-bashing paragraph is just ridiculous. If nobody can arrange application of resources, why do we have CEOs?
What friends of free markets should argue is not that it’s impossible to trust anyone to apply a billion of dollars towards a goal, but that in case of ECONOMY there are better ways (such as trust people with their own money to be spent into their own interest).
Well, Pete, the thing about a successful army that makes it a good analogy to a successful firm is that (1) it’s a volunteer organization, and (2) its survival is conditional on achieving objective external criteria (winning the war), not on how good they feel about themselves, or how popular they are in a public vote.
When either factor is missing, e.g. when you have a conscript army, or a peacetime army, it tends not to work nearly as well.
So I wouldn’t say there’s anything inherently wrong about having the government handle a billion dollars if it could only get ahold of that billion through voluntary donations (i.e. it wasn’t a “conscript army” of bucks), and its (the government’s) survival was conditional on objective measures of success, e.g. if the stimulus doesn’t work then everyone in government who had anything to do with it loses their job and their pension, or better yet is taken out and shot, then buried at midnight in a secret grave.